Respondents' contentions:
CIFF companies were duly organized and are existing by virtue of the Corporation Code. Their
stockholders are private individuals and entities.
They are not public officers as defined under The Anti-graft and Corrupt Practices Act but are
private executives appointed by the Board of Directors of the CIFF companies.
Issue:
Whether or not the Ombudsman committed grave abuse of discretion. --NO
Held:
PETITION DISMISSED.
Definition of "government owned or controlled corporation" contained in par. (13), Sec. 2,
Introductory Provisions of the Administrative Code of 1987, i. e., any agency organized as a stock or
non-stock corporation vested with functions relating to public needs whether governmental or
proprietary in nature, and owned by the Government directly or through its instrumentalities either
wholly, or, where applicable as in the case of stock corporations, to the extent of at least fifty-one (51)
percent of its capital stock.
The definition mentions three (3) requisites, namely:
1. any agency organized as a stock or non-stock corporation;
2. vested with functions relating to public needs whether governmental or proprietary in nature; and,
3. owned by the Government directly or through its instrumentalities either wholly, or, where applicable
as in the case of stock corporations, to the extent of at least fifty-one (51) percent of its capital
stock.
In the present case, all three (3) corporations comprising the CIIF companies were organized as stock
corporations:
The UCPB-CIIF owns 44.10% of the shares of LEGASPI OIL, 91.24% of the shares of
GRANEXPORT, and 92.85% of the shares of UNITED COCONUT.
Obviously, the below 51% shares of stock in LEGASPI OIL removes this firm from the definition
of a government owned or controlled corporation.
Our concern has thus been limited to GRANEXPORT and UNITED COCONUT as we go back to the
second requisite.
Unfortunately, it is in this regard that petitioner failed to substantiate his contentions. There is no
showing that GRANEXPORT and/ or UNITED COCONUT was vested with functions relating to
public needs whether governmental or proprietary in nature unlike PETROPHIL in Quimpo.
The Court thus concludes that the CIIF companies are, as found by public respondent, private
corporations not within the scope of its jurisdiction.
With the foregoing conclusion, we find it unnecessary to resolve the other issues raised by petitioner.
shares issued in their names by PNCC as they considered it to be diminution of the value of their
investments.
He claimed that some of the GFIs refused to accept delivery of the stock certificates from PNCC while
others were not even aware of the issuance of the certificates of stock in their names.
Consequently, GFIs continued to charge and receive payments for their loan and interest charges from
PNCC though these loans were supposed to have been converted into common stock pursuant to LOI
1295.
Cuenca filed before the SEC an Urgent Application for Temporary Restraining Order and Writ of
Preliminary Injunction seeking to enjoin PNCC from allowing the GFIs to vote their shares of stock in
PNCC or from exercising any right arising from the shares.
SEC granted petition of urgent TRO.
Cuenca filed a third amended complaint before the RTC Makati City for enforcement and strict
compliance with LOI 1295;
o cancellation of all penalties, interest and surcharges;
o enjoinment of the GFIs from receiving any real or personal properties from PNCC; and
o cancellation of the trasnfer of a land covered by TCT to APT.
SEC granted preliminary injunction.
PNCC filed a petition for certiorari before SEC en banc to review and set aside the SEC orders.
--DISMISSED
PNCC filed a Motion to Designate Hearing Panel on the ground that the instant case would be better
heard and resolved by a hearing panel of three than by a sole hearing officer, considering the interests
the Philippine Government holds in PNCC through the GFIs. --GRANTED.
SEC designated the following as hearing officers: Atas, Fabrero, Lobigas.
Hearing Panel Decision: dismissed Cuenca's complaint for lack of merit and revoking the writ of
preliminary injunction issued.
it found that the evidence presented by PNCC and GFIs constituted substantial proof of the
implementation of LOI 1295.
it reasoned that not only did PNCC issue the shares of stock but such fact was corrobated by
Caval Securities Registry, Inc. (PNCC stock transfer agent)
prior to the filing of the instant case, GFIs have been nominating their representatives to
PNCC's Board of Directors which is an attribute of ownership of shares of stock in PNCC.
it also took cognizance the Deed of Confirmation and Supplement to Deed of Confirmation
executed by the GFIs, which erased all doubts on the implementation of the LOI 1295 by the
conversion of the GFIs loan receivables from PNCC into latters equity.
it found the pieces of evidence presented by Cuenca to be inconsequential and insufficient to
overthrow the weight of the evidence presented by respondents that a conversion of PNCC's
debt into equity was implemented.
SEC EN BANC: affirmed decision of Hearing Panel
CA: dismissed petition of Cuenca
Issue/s:
Whether or not Cuenca was denied due process.
Held:
PETITION DISMISSED.
NO DENIAL OF DUE PROCESS